With the planned federal Investment Tax Credit step-down on the horizon, utility project developers and EPCs are turning over every rock in search of cost reductions. In its latest report, PV Balance of Systems 2015, GTM Research uncovers the most significant areas forsolarPV cost reductions over the next five years.

As of the second quarter of this year, GTM Research’s modeled turnkey cost of a fixed-tilt utility system is $1.49 per watt, down from $1.58 per watt in the first quarter of the year. Modules represent 45 percent of that cost, and balance of systems encompass the remaining 55 percent.

Report author MJ Shiao notes that cost reduction isn’t going to come just from big-ticket items like 1,500-volt systems and higher module efficiencies. Rather, many small optimizations will ultimately drive system costs toward $1.00 per watt.

One area that will see significant reductions is the electrical balance of systems (EBOS), which includes inverters, wiring, skid components, DC protection and combiners, AC subsystems, and monitoring equipment. Cost reduction comes primarily from eliminating the amount of EBOS material necessary to build a project.

For example, the industry is pushing toward more integration of adjacent electrical equipment into the PV inverter, including items like DC recombiners, communications and low-voltage AC output. Developing a more space-efficient inverter will limit the amount of civil engineering, trenching and wiring work required for installation.

Certainly, market advancements like a readily available 1,500 Vdc supply chain will play a big role in cost reduction, but the report also dives into other technologies that reduce the number of combiner boxes in the field, including DC optimization and wire-integrated DC circuit combining.

Due to these cost reduction strategies, the report estimates that ground-mount PV EBOS costs will fall by nearly 35 percent between 2015 and 2020. With 29 gigawatts of U.S. ground-mount PV expected to be installed from 2015 through 2020, EBOS innovations alone will drive nearly $3 billion in industry savings.

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Join us for Greentech Media’s 5th Annual U.S. Solar Market Insight Conference Nov. 2-4 in San Diego, where Director of Solar Research MJ Shiao will lead an afternoon of discussions on the costs and supply-chain environment for U.S. solar.